Rejection

What Does Rejection Mean?

Rejection in insurance refers to an insurer’s decision not to cover a particular risk, resulting in the denial of an insurance policy.

It can also indicate that an insurance claim has been denied due to an improper or faulty claim submission.

Insuranceopedia Explains Rejection

An insurance company may choose not to issue a policy to an individual if it determines that covering a specific risk could pose significant financial challenges. For example, some health insurance companies may reject applicants with certain lifestyle habits, such as smoking or drug addiction. Applicants in those categories aren’t always out of options. Some insurers will write life insurance for smokers or policies for people with a history of drug use, often at higher premiums than standard rates.

Rejection can also occur when an insurance company refuses to pay a claim due to submission errors, implying the company has not officially received the claim. In such cases, the insured can rectify the errors by adhering to the company’s procedures and resubmitting the claim.